Corporate social responsibility, or CSR, has engendered many definitions, but perhaps one of the best comes from the American Conference Board. "The continuing commitment by businesses to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large."
Put simply, CSR is about protecting a company's "licence to operate" – and it commonly describes a company's commitment to best practices and continuous improvement, community involvement and ethical business conduct.
Indeed, there are now some very real market drivers that make sound CSR performance and positioning of strategic importance, particularly for companies involved in the built environment.
Not least, there is strong government recognition that this area should be addressed by businesses. In 1999, A New Vision for Business was published by the UK government. This noted that a company's reputation and licence to operate around the world depended on meeting wider responsibilities while competing effectively. In early 2000, the government appointed the first CSR minister in Britain and in late 2000, the Sustainable Development Commission was set up, reporting to government. And last week, Douglas Alexander was appointed the new minister for CSR and e-commerce.
Many of Amec's key customers in sectors such as oil and gas, power generation, mining and forest products put new pressure on the supply chain by giving preference to suppliers who make CSR a priority.
Similarly, the investment community is making CSR a priority and starting to use environmental and social performance as a measure of companies likely to deliver sustained and superior returns. Some pension funds have committed to vote against companies whose annual reports are not accompanied by environmental reports.
There are several pressures pushing businesses to embrace CSR, but several companies have taken the first step in this direction for other reasons – it's good for business and quite simply, it's the right thing to do.
A MORI survey in 1999 polled 25,000 adults in 23 countries on what they felt mattered most in forming an impression of companies. Fifty-six per cent chose responsibility [employee treatment, community commitment, ethics and environment], while 40% chose product and brand quality and 34% chose business and financial performance. Indeed, other MORI surveys have shown that the majority of UK adults want to see companies improve their social, environmental and ethical performance.
CSR is a positive opportunity to ‘do good’ and ‘do well’ at the same time. Profitability and responsibility can be mutually reinforcing
A good example of how companies can benefit from CSR is BAA's experiences at Heathrow in dealing with the community in which it operates over plans for a fifth terminal. The company worked hard to enter a "Contract with the Community". This involved the commitment to 'put sustainability at the heart of planning and act beyond compliance … to force a step change in environmental performance and in the treatment and support of local communities' and to communicate.
There were many other impressive aims, including making BAA a company its employees were proud of and motivated to work for – but the point is, through a serious commitment to this exercise, BAA greatly increased the support and trust of its neighbours.
At Amec, we see CSR as a positive opportunity to do good and do well at the same time. Indeed, we believe profitability and social responsibility can be mutually reinforcing. We believe that the potential benefits of implementing a programme at Amec include greater attraction and motivation of employees, enhanced risk management, a stronger brand, new client service opportunities, the attraction of new investors and potential cost savings.
Last year, we set out to develop the basis of a CSR programme, which would be appropriate for our expanded global business. We appointed a main board director with responsibility for the area and a task group of senior managers was formed to develop recommendations. This group includes representatives from our business and environmental operations, corporate affairs and human resources.
A survey is being undertaken of Amec's practices in health and safety, the environment, community involvement and ethical business conduct. It will identify gaps and opportunities and examine current trends and best practices.
So what should a CSR programme contain? At Amec we aren't quite there yet, but it is clear that these policies have to translate into practice or there is no real output. It has to be developed in a spirit of honesty and openness without shying away from accountability for what has not been achieved but is planned.
For Amec there is another incentive – to better develop our role as a provider of socially responsible solutions for our clients. This may be through our environmental services division, our work in the development of alternative energy forms such as wind power, or our cultural training programmes in North America which help AMEC and its clients to work more effectively with local aboriginal communities.
Postscript
Peter Mason is chief executive of Amec.
